Magic Leap Reportedly Laying Off 1,000 Employees As It Abandons Consumer AR Business

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There have been lots of ups and down over at Magic Leap, a company that jumped onto the primetime stage a few years ago with an outrageous augmented reality demo that featured over-the-top weapons, killer robots, and tanks blasting through an office complex. As it turns out, that demo was too good to be true.

Since that time, the company has gone on to release its first-generation Magic Leap 1 AR headset and controller, and has embarked on a journey to satiate the needs of both consumer and enterprise markets. Now, we're learning that the company is once again finding itself in troubled waters. In a blog post entitled "Charting a New Course", CEO Rony Abovitz announced that the company is stepping away from its focus on the consumer business.

Amid the backdrop of the COVID-19 pandemic, Abovitz said that he and his executive team have "had to examine the way our company operates," and that of course means layoffs are on the way. Although he didn't indicate how many employees would be let go, Bloomberg's sources indicate that the figure will be around 1,000.

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As the company abandons consumer-centric ventures including games and apps focused on entertainment, Magic Leap will shift gears to ramp up its enterprise ventures. "Given the very difficult and challenging circumstances businesses now face, there is an increased need for technologies like ours and we are currently in the process of negotiating revenue generating strategic partnerships that underscore the value of Magic Leap’s technology platform in the enterprise market," Abovitz added.

The Magic Leap 1 AR headset is currently available with a rather steep asking price of $2,295 for a barebones system with a limited warranty. Stepping up to the "Developer Suite" gets you a developer hub and a 1-year warranty for $2,495. The "Enterprise Suite" costs $2,995 and includes enterprise support and a 2-year warranty.

Even if Magic Leap is able to make strides in the enterprise sector, it will face stiff competition from Microsoft, which fields the similar HoloLens 2, and has the backing from a number of high-profile corporate customers.